- PepsiCo Inc (NASDAQ:PEP) shares are up Tuesday morning following its first-quarter results, which topped the Street view.
- PEP reported first-quarter FY23 sales growth of 10.2% year-on-year to $17.85 billion, beating the consensus of $17.22 billion.
- Net revenue from Frito-Lay North America increased 15% Y/Y, Quaker Foods North America rose 9%, and PepsiCo Beverages North America climbed 8%.
- Latin America sales jumped 21% Y/Y, and Europe sales grew 5%.
- Gross profit increased 12.4% Y/Y to $9.7 billion, and the profit margin expanded 112 basis points Y/Y to 55.2%.
- Operating margin compressed by 1,778 basis points to 14.7%, and operating income for the quarter plunged 50% to $2.6 billion.
- The company held $4.8 billion in cash and equivalents as of March 25, 2023. Net cash used in operating activities for the quarter totaled $(392) million.
- Adjusted EPS of $1.50 beat the analyst consensus of $1.39.
- Outlook: PepsiCo raised the FY23 organic revenue growth outlook to 8% (previous outlook 6%).
- PepsiCo sees 9% core constant currency EPS growth (prior 8%).
- The assumption implies 2023 core EPS of $7.27 compared to 2022 core EPS of $6.79.
- Total cash returns to shareholders is expected to be approximately $7.7 billion, comprised of dividends of $6.7 billion and share repurchases of $1.0 billion.
- Price Action: PEP shares are trading higher by 1.30% at $187.92 in premarket on the last check Tuesday.
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